Small Business Manage Logistics

As of 2025, over 61% of small businesses in the U.S. that sell physical products operate without owning or leasing a warehouse, according to data from the U.S. Small Business Administration (SBA) and the National Retail Federation (NRF).

Instead, they depend on a mix of third-party logistics (3PL) providers, on-demand storage, and direct supplier fulfillment models. This shift is not just about saving money – it’s about flexibility, scalability, and speed.

The traditional idea of having your own warehouse – with forklifts, shelving, and a loading dock – is fading fast among small and mid-sized merchants. High rental prices, supply chain volatility, and the rise of e-commerce infrastructure mean that outsourced and tech-driven logistics now handle what used to require an entire operations team.

Owning a warehouse today costs an average of $8.75 per square foot annually for lease, plus $25-35 per hour for warehouse labor in most U.S. metro areas.

For a 10,000-square-foot facility, that can mean $200,000-$300,000 a year in fixed costs – before even counting equipment, software, and insurance. That’s why most small businesses are now adopting lighter, flexible logistics models that scale only when orders grow.

Why Small Businesses Skip Owning a Warehouse

A worker stands in front of industrial shelves stacked with packaging materials inside a warehouse
Small businesses are now running logistics from home offices, no warehouse required

For a small business owner, logistics is often a balancing act between cost, speed, and control. But the numbers are clear: in 2024, the U.S. had more than 12 million small businesses involved in product-based operations, and fewer than 2.5 million owned or leased their own storage or fulfillment facility.

The biggest reasons include:

  • Lower Fixed Costs – Renting or owning space ties up capital. Outsourcing lets owners pay per order or per pallet stored.
  • Faster Scalability – You can increase inventory volume during peak season without long-term commitments.
  • Reduced Staffing Burden – No need for in-house pickers, packers, or forklift drivers.
  • Improved Geographic Reach – 3PLs and fulfillment networks store goods across regions, cutting delivery times by up to 40%.
  • Focus on Growth – Without the warehouse overhead, owners can focus on marketing, customer experience, and product design instead of logistics.
Challenge Owning a Warehouse Using Outsourced Logistics
Upfront Investment $150,000+ $0-$2,000 setup fee
Monthly Overhead $12,000-$25,000 Scales with order volume
Staffing Needs 3-10 employees None (outsourced)
Fulfillment Speed Depends on the team Often 1-2 days nationwide
Flexibility Low High (pay-as-you-go)

The Core Logistics Models That Work

Person holding a neatly packed parcel ready for shipping inside a home or small office environment
Modern fulfillment blends 3PL centers, dropshipping, and smart inventory systems

Here’s how small business owners manage inventory, shipping, and order flow without ever touching a warehouse key.

Model Description Advantages Limitations
3PL Fulfillment Centers Outsource storage, packing, and shipping to third-party providers Scale easily, no staff, nationwide coverage Service fees, less control
Dropshipping Supplier ships directly to the end customer Zero inventory cost, instant launch Limited quality control, low margins
On-Demand Warehousing / Co-Warehousing Rent small shared spaces for short periods Low commitment, flexible Local availability varies
Amazon FBA & Walmart Fulfillment Services Use retail giants’ existing fulfillment networks to store and deliver products Built-in infrastructure, 2-day shipping Platform fees and requirements
Hybrid Logistics Combine 3PL and self-storage for control and scalability Balance cost with flexibility Requires integration tools

The Role of Amazon & Walmart Prep Services

Warehouse employee organizing boxes on metal shelves while checking inventory with a tablet
Prep centers handle packaging and labeling so small brands can scale like major retailers

A major enabler of warehouse-free logistics is the rise of specialized preparation and compliance services that help small sellers meet the strict packaging, labeling, and shipment requirements of online marketplaces.

Companies offering Amazon & Walmart Prep Services handle everything from product inspection and barcoding to bundling and palletization before inventory is sent to major fulfillment centers. This has revolutionized small-scale e-commerce operations by eliminating the need for physical warehouses.

For example, a small skincare brand selling 500 units per month can ship bulk inventory directly from a manufacturer to a prep center in a tax-free state like Delaware. The center then prepares and forwards the products to Amazon or Walmart distribution centers.

This process:

  • Cuts total handling costs by 25-40%
  • Reduces delivery time to marketplaces from 2 weeks to 3-5 days
  • Eliminates the need for in-house staff or rented storage space

Task Handled By Prep Service? Savings vs. In-House
Labeling & Barcoding Yes 60-80% cheaper
Polybagging & Bundling Yes 50% cheaper
Storage & Staging Short-term $0 monthly fixed cost
Pallet Shipping Managed 15-25% logistics cost reduction

In short, prep services have become the “warehouse alternative” for thousands of Amazon and Walmart sellers, freelancers, and boutique brands – streamlining logistics so owners can focus on growing their business, not running storage operations.

Future of Warehouse-Free Logistics (2025-2030)

Close-up of a hand scanning a barcode label on a cardboard box in a fulfillment center
Automation and local delivery hubs are reshaping how goods move worldwide

By 2030, analysts expect over 70% of small e-commerce businesses to run without dedicated warehouse space. This trend is powered by:

  • Automation & AI tools that optimize inventory allocation and delivery routes
  • On-demand warehouse marketplaces (like Flowspace or Ware2Go) for temporary use
  • Tax-free prep centers and multi-platform fulfillment networks
  • Sustainable delivery systems focusing on smaller, local hubs rather than mega-facilities

As global retail e-commerce continues to grow – projected to reach $12.35 trillion by 2030 – the future of logistics will favor flexibility over ownership.

Year Businesses Without Warehouse (%) Key Trend
2020 42% Rise of e-commerce post-pandemic
2023 57% 3PL and FBA adoption boom
2025 61% Prep centers become mainstream
2030 (proj.) 72% AI and flexible networks dominate

Bottom Line

Owning a warehouse is no longer a requirement – or even a smart move – for most small business owners. With 3PLs, prep centers, and shared logistics platforms, you can run a national-scale operation from your laptop.

The modern small business owner doesn’t need a warehouse – they need a network, a strategy, and trusted logistics partners. The businesses that understand this are not just surviving – they’re scaling faster than ever before.